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The Confusion over Trade

December 17, 2018

International trade has been much in the news lately. The controversy with Saudi Arabia and now with China has opened an agonizing question that seems to have paralyzed our deep thinkers in Ottawa: the conflict between trade and social issues. Specifically, should Canada trade with countries that don't respect human rights?

The question ignores the essence of trade and assumes an invalid concept: that Canada trades. We don't. Canada doesn't trade with China, or the U. S. or Britain or … And neither do any of these nations trade with Canada. Trade is always carried out by individuals or companies. When I sell a training course to a company in New York, Canada has nothing to do with it. Neither does the U. S. The sale is an agreement between me and the customer. Whether they're in New York or Saskatoon makes no difference to me. (Except that in the former case, I'm paid in more valuable U. S. dollars, but that's another matter.)

So the question of balancing trade with social issues like human rights becomes the question of whether the government—of Canada or anywhere else—should restrict a voluntary agreement between two consenting parties based on some value the government has that the parties may not share. There's a difference between saying, "We don't like you, so we're not going to sell you stuff," versus, "We don't like you so we're not going to let anyone else sell you stuff." The first is a voluntary statement of one's values. The second is a forced imposition of one's values on others.

Now I can hear the outraged objection that governments do trade. For example, the Saudi military, obviously a government operation, wants to buy military vehicles from a Canadian supplier. Well of course governments buy things. That's why we pay taxes. But the purchase is still between two organizations or individuals. Who owns either of them is irrelevant. When I sell a training course, I don't query the customer's corporate structure, I just deliver.

I will concede that it makes good sense not to arm your enemy. Selling nuclear weapons to North Korea is a bad idea. So banning commercial transactions that create a security risk is a matter of protecting citizens, which is a key government responsibility. For everything else, let the goods flow.